Top economists urge Chancellor to scrap 50p tax in Financial Times letter

Top economists urge Chancellor to scrap 50p tax in Financial Times letter

September 07, 2011 1:05 PM

Twenty top economists have written to the Financial Times urging the Government to scrap the 50p rate of income tax to boost economic growth. The letter adds weight to the growing consensus that the 50p rate is economically damaging and that it will fail to raise much for the Treasury, with some estimating the policy actually loses them tax revenue.

We are concerned that Britain’s 50p income tax is doing lasting damage to the UK economy. It gives the UK one of the highest personal tax regimes in the industrialised world, making it less competitive internationally and making us less attractive as a destination for both foreign investment and talented workers.

Since 1997, Britain's place in the World Economic Forum’s low tax ranking has fallen from 4th to 95th as our competitors have reduced their tax burdens while we have increased ours. Britain urgently needs a radically simpler tax system with lower rates. But getting rid of a tax that probably doesn’t even raise any money for the Treasury has to be a policy priority for a Government that claims to be serious about growth.

We call on the government to drop the 50p tax at the earliest opportunity as part of a package of measures to stimulate growth. Only by returning to an internationally competitive tax regime will Britain enjoy long-term sustainable economic growth.

The authors of the letter, who come from a range of viewpoints on the spectrum of political-economic thought, are correct. The Government must not waste any more of Britain’s economic prospects on this economically damaging political gimmick. It's time for the Government to get off the fence and explain with conviction why this tax is a bad idea. It’s time to scrap the 50p rate.Twenty top economists have written to the Financial Times urging the Government to scrap the 50p rate of income tax to boost economic growth. The letter adds weight to the growing consensus that the 50p rate is economically damaging and that it will fail to raise much for the Treasury, with some estimating the policy actually loses them tax revenue.

We are concerned that Britain’s 50p income tax is doing lasting damage to the UK economy. It gives the UK one of the highest personal tax regimes in the industrialised world, making it less competitive internationally and making us less attractive as a destination for both foreign investment and talented workers.

Since 1997, Britain's place in the World Economic Forum’s low tax ranking has fallen from 4th to 95th as our competitors have reduced their tax burdens while we have increased ours. Britain urgently needs a radically simpler tax system with lower rates. But getting rid of a tax that probably doesn’t even raise any money for the Treasury has to be a policy priority for a Government that claims to be serious about growth.

We call on the government to drop the 50p tax at the earliest opportunity as part of a package of measures to stimulate growth. Only by returning to an internationally competitive tax regime will Britain enjoy long-term sustainable economic growth.

The authors of the letter, who come from a range of viewpoints on the spectrum of political-economic thought, are correct. The Government must not waste any more of Britain’s economic prospects on this economically damaging political gimmick. It's time for the Government to get off the fence and explain with conviction why this tax is a bad idea. It’s time to scrap the 50p rate.

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Welcome to The TaxPayers' Alliance, Britain's grassroots campaigning group dedicated to reforming taxes, cutting spending and protecting taxpayers. If you like what we do, become a supporter now by signing up to our mailing list using the form below. John O'Connell, Chief Executive